CANADA FX DEBT-Loonie retreats from 2-week high as oil prices tumble

(Adds strategist quotes and details on activity; updates
prices)
* Canadian dollar falls 0.2% against the greenback
* Loonie touches its strongest level since May 22 at 1.3363
* Price of U.S. oil decreases 3.4%
* Canada's 10-year yield hits a two-year low at 1.410%
By Fergal Smith
TORONTO, June 5 (Reuters) - The Canadian dollar weakened
against its U.S. counterpart on Wednesday, pulling back from an
earlier two-week high as oil prices fell and the greenback
halted this week's decline.
At 4:13 p.m. EDT (2013 GMT), the Canadian dollar
was trading 0.2% lower at 1.3419 to the greenback, or 74.52 U.S.
cents. The currency touched its strongest intraday level since
May 22 at 1.3363.
The turn lower for the loonie was due to a rebound in the
U.S. dollar after data showed U.S. services sector activity
picked up in May and due to lower oil prices, said Daniel
Katzive, head of FX strategy North America at BNP Paribas in New
York.
The U.S. dollar , which has been pressured this week
by speculation that the Federal Reserve would cut interest
rates, gained ground against a basket of major currencies.
The price of oil, one of Canada's major exports, fell to its
lowest since January after U.S. crude inventories unexpectedly
surged, adding to concerns about slowing global growth. U.S.
crude oil futures settled 3.4% lower at $51.68 a barrel.
Canadian labor productivity grew by 0.3% in the first
quarter, reflecting a decline in hours worked for the first time
in seven consecutive quarters, while business output remained
virtually unchanged, Statistics Canada said.
Economists worry that weak productivity growth in Canada
could hold back growth in its trade-dependent economy.
White House trade adviser Peter Navarro said U.S. tariffs on
Mexican goods may not have to take effect because Washington now
has Mexico's attention on the issue.
The tariffs could undermine chances of a new North American
trade deal coming into force. Canada sends about 75% of its
exports to the United States.
Canadian government bond prices were higher across the yield
curve, with the two-year up 10 Canadian cents to
yield 1.338% and the 10-year rising 32 Canadian
cents to yield 1.443%.
The 10-year yield touched its lowest intraday since June
2017 at 1.410%.
(Reporting by Fergal Smith; editing by Diane Craft)